Budget 2025 may see higher allocation for transport infrastructure despite tight finances — RHB IB
Budget 2025 may see higher allocation for transport infrastructure despite tight finances — RHB IB
The proportion of development expenditure to the transportation sub-sector under Budget 2025 could be “reasonably higher” than the 21.3% budgeted for this year, RHB IB said in its budget preview note. The government is also likely to give updates to the Mass Rapid Transit 3 project, the research house noted.
KUALA LUMPUR (Sept 25): Despite tight government finances, Malaysia’s upcoming Budget 2025 may still see higher allocations for transportation-related infrastructures and incentives to spur homeownership, said RHB Investment Bank (RHB IB).
The proportion of development expenditure to the transportation sub-sector under Budget 2025 could be “reasonably higher” than the 21.3% budgeted for this year, RHB IB said in its budget preview note. The government is also likely to give updates to the Mass Rapid Transit 3 project, the research house noted.
“The ample supply of labour — combined with manageable material cost pressures — puts contractors in a sweet spot of not only being able to ramp up project progress, but also be ready to accept new jobs that may boost earnings visibility,” RHB IB said.
Malaysia has been trying to shrink a long-running fiscal deficit though weak oil prices complicate the efforts as the government relies on receipts from oil and gas for a large chunk of its revenue.
The government, however, is under pressure to step up spending to support growth at a time of mounting external risks for the export-dependent economy. Budget 2025, to be tabled in the Dewan Rakyat on Oct 18, would also coincide with the final year of the 12th Malaysia Plan.
Dividend payout by national oil-and-gas company Petroliam Nasional Bhd, or Petronas, is expected to be lower than RM32 billion in 2025 due to a weaker set of results in 2024 amid lower oil prices, RHB IB noted.
Still, the government is expected to dish out some incentives for first-time homebuyers amid calls by developers to revive the homeownership campaign and one-off first-time homebuyers’ grant, the research house flagged.
“While we welcome this initiative, we are not sure if the government has the budget to offer the grant, as pump-priming and other infrastructure projects may be prioritised,” RHB IB cautioned.
The government may offer “other incentives for this group of buyers instead,” the research house said without elaborating.
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Source: EdgeProp.my
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